Tuesday, December 6, 2016

Winter: New England, "Old" England, And Northwest Europe Will Compete For LNG -- December 6, 2016

New England, US: enough electricity production for the winter; natural gas supplies raise concern. Link here. Data points:
  • ISO New England: operator of the region's power system
  • ISO NE has provided financial incentives to power plants to buy and store fueld
  • there should be adequate electricity generation
  • one glitch: gas-fired plants may not be able to get enough natural gas because too much of the gas brought into NE via pipelines is being used for heating
  • tankers bringing needed LNG to NE could divert elsewhere if price is better elsewhere
  • situation won't improve soon
  • 1,500 megawatts Brayton Point Power Station, coal-sourced, will close; will be replaced by new gas-fired generation, but no additional infrastructure to deliver or store natural gas is currently being developed
Meanwhile, it's very possible New England will be competing with "OLD" England for that LNG
From Bloomberg, data points:
  • UK's biggest natural gas storage site off England's east coast, Centrica, has been of-line for five months -- emergency maintenance
  • when it comes back on-line; it will hold less than half its typical storage
  • in addition, there is a dearth of LNG supplies to northwest Europe
  • bottom line: this winter -- competition among New England, "OLD" England, and northwest Europe for LNG
My assistant ran the numbers and she thinks LNG could increase by 47% if we have a colder-than-normal winter:

Sophia: age 2.5 years old

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